Here’s what you need to know about life insurance for freelancers

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Here’s what you need to know about life insurance for freelancers

35% of the U.S. workforce are freelancers and that number is rising. They’re expected 50% of the U.S. workforce by 2020. It’s a lot to ask of those who are life insurance for freelancers responsible for managing their own health and life insurance. Here are the facts if you’re one.

Prioritizing Coverage Is Key

The challenges of freelance work include fluctuating income. This can make it difficult to pay all your insurance requirements. A job or gig that you’ve been working on can end before another one is lined up. This makes it difficult to keep a consistent personal budget.

While life insurance may not seem to be a top priority when compared with other needs and expenses it is vital, especially if you are the breadwinner of your household. It is important to make sure that your loved ones can cover any expenses and debt if you are not there. It’s crucial to evaluate your family’s needs and establish your insurance priorities.

The use of professional unions is possible

Freelancers will find many professional unions like the National Writers Union or Freelancers Union to be great resources. These unions not only advocate for freelancers and offer legal support in contract disputes but also provide life insurance plans for members. Benefits that are available through unions could include access to benefits that freelancers might not be able to get on their own.

If you are considering joining a union, talk to a representative about health and dental plans as well as other types of insurance such as retirement benefits and life- and disability insurance. They will probably have information about options in your home state.

Spousal coverage is a good option, but not always complete

You should consider whether dependent coverage is available through your spouse’s employer if you are married and work full-time. Before you decide to enroll, be sure to verify the coverage’s cost and completeness. A few employer-sponsored plans add a spousal surcharge to increase the cost. This could be too costly for your household budget. However, your spouse may be able supplement their coverage with products you can buy individually, such as life insurance.

While life insurance may not seem necessary if you are a freelancer trying balance your finances, it is an essential component of your benefits. These tips will help you choose the best benefits for yourself and your family.

What is Life Insurance? An Introduction

Life insurance is a contract that you sign with an insurance company. It promises your beneficiaries a certain amount of money if you die. You make regular payments called premiums. The premium amount depends on your age, gender, and how much life insurance you have purchased.

Life insurance covers your beneficiaries and pays out the money in case of your death. They can use the money to:

  • Compensation for lost income
  • Education funding
  • Reduce household debt

Funeral and related expenses:

You and your family may be able to benefit from certain types of life insurance while you are still alive. Permanent life insurance has a cash-value component, which you can use throughout your life.

There are two main types of life insurance

Term insurance protects your loved ones for a specific time, typically from one to 20. Insurance stops if you stop paying premiums. Term policies pay benefits in the case of your death during the policy period; however, they don’t have cash value.

Permanent life insurance policies are not subject to expiry; they can be used to protect your loved one forever, as long as you pay the premiums. These policies may accumulate cash value. Learn more about the difference in term and whole life insurance.

How much life insurance are you going to need?

The goal of life insurance should be to make a plan that will compensate for the loss in your economic contribution. These are the two methods you can use to determine how much life coverage you need. Talk to your financial advisor about the best strategy for you.

You will need replacement income

This is a proven method for determining how much financial support you can expect to make to the family over time. It takes into account everything you provide for your loved ones, not just your income.

  • Salary
  • Benefits/health insurance
  • Retirement savings, 401(k), and retirement savings
  • Personal services that you provide for your family.
  • You will spend less on your personal consumption – the annual spending you make on personal needs such as entertainment, food, clothing and other necessities.

Analyse of survival needs

This is done by replacing the amount of income your surviving spouse or children needs to maintain their desired income level and lifestyle. The survivors’ life insurance needs are then evaluated against their assets, income sources, and existing life insurance to determine if they need additional coverage. An advisor or financial professional can help you calculate the exact figure and determine the appropriate coverage.

Additional Resource:


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